In the process of completing an oil or gas well, it is common to lower tool strings into the well on long lengths of tubing. The tubing serves not only to support the weight of the string of tools in the well, but also to transmit pressure from the surface of the well for activating the tools to perform various functions, such as sealing the well bore or perforating the well casing for access to product-bearing deposits.
Downhole ballistic tools of such systems are typically detonated by an attached firing head which, in the case of tubing-conveyed systems, is either hydraulically activated from the surface of the well by pressure transmitted through the tubing, or by a weight, sometimes referred to as a drop bar, dropped down the tubing from the surface of the well.
In some instances a packer is set above the region of the well casing to be perforated prior to firing the perforating gun, sealing off the area within the well below the packer (sometimes called the "rat hole") from the upper well annulus.
When the rat hole is at an instantaneously lower pressure than the formation fluids just outside the casing at the depth and time of perforating, the well is said to be perforated in an "underbalanced" condition. This perforating condition is useful, for instance, to immediately extract perforation debris and other potentially well-plugging media from the vicinity of the perforation by a fast flow of formation fluids in through the freshly perforated casing holes.
Conversely, when the rat hole is at an instantaneously greater pressure than the formation fluids just outside the casing at the depth and time of perforating, the well is said to be perforated in an "overbalanced" condition. If the pressure differential is large enough, the process is referred to as "extreme overbalance" perforation, and is useful for forcing well fluids out into the formation through the freshly perforated casing at high velocities to clear product flow paths in the formation, or lengthen or create additional flow paths through the formation (a process commonly known as "fracturing"). On some occasions, extreme overbalance pressure differentials are practically limited to avoid detrimental pressure damage to the well casing.
The choice of whether or not to perforate a well in an underbalanced or overbalanced condition depends in large part upon known or assumed formation characteristics. Sometimes accurate measurements of formation characteristics are not available without lowering a tool string into the well.